Suppose That General Business Conditions Improve, and at the Same

question 23

Multiple Choice

Suppose that general business conditions improve, and at the same time, wealth increases. Based on this information, we know that:

• A) bond prices increase.
• B) yield to maturity decreases.
• C) the real interest rate increases.
• D) the quantity of bonds increases.

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Definitions:

Depositary Banks

Banks that hold securities (such as shares or bonds) in custody for other parties, facilitating securities trades and dividend payments.

State of Qatar

A sovereign country located in Western Asia, occupying the small Qatar Peninsula on the northeastern coast of the Arabian Peninsula.

Negotiation

The process of discussing and arriving at a mutual agreement between parties.

Ambiguous

Open to more than one interpretation; not having one obvious meaning.